Question

One of the main macroeconomic objectives of any country in the world is economic growth as measured by the gross domestic product (GDP) per capita from one year to the other. 5.1 Critically evaluate whether the government’s main objective should be economic growth. 5.2 Discuss ANY FIVE (5) sources of economic growth in any country of your choice. .

Answer 1

Every government focused on the economic growth of their country. The major objectives of government are, stable pricing with low inflation, steady and sustained growth, low unemployment rate, maintain balance in Balance of Payment. Government should focus more in economic growth. A country’s overall performance can be understood through the economic growth. So the authority tried to increase the productivity of factors of production, enough availability of factors of production, necessary macroeconomic policies and maintain proper legal and law system. The most important responsibilities of government to avoid clashes between economic factors include maintenance of health growth and low inflation, keep the inflation constant through without dampen the growth rate. If we critically evaluate this concept, there are several other objectives of government policy like social structure management, proper law and order, efficient foreign relations etc. Government should concern and give preference to these objectives also.
The major sources of economic growth are natural resources, human resources, physical and technological factors and institutional factors.
Natural factors: The factors like land, metals and oil were very small in quantity. It cannot be increased whenever it becomes necessary. The oil availability ca expands through active exploration and extraction.
Human factors: The availability of labour contributes the level of growth. A country can increase its labour participation through increasing the level of population. It can also increase through immigration policy. The human capital includes educational qualification, training and skills, creativity etc.
Social factors: Society gives emphasis over education and allows gender equality among labour force. Exclusion of women from education and labour participation will reduce the level of total human capital.